Public Disclosure Authorized SOUTH ASIA Nepal Governance Global Practice Recipient Executed Activities Technical Assistance Loan FY 2012 Seq No: 2 ARCHIVED on 07-Dec-2015 ISR18236 Implementing Agencies: Public Disclosure Authorized Key Dates Key Project Dates Bank Approval Date:13-Oct-2011 Original Closing Date:30-Jun-2015 Project Development Objectives Effectiveness Date:31-Oct-2011 Revised Closing Date:30-Jun-2016 Public Disclosure Authorized Project Development Objective (from Project Appraisal Document) The Project Development Objective is to improve expenditure control and enhance government accountability and transparency by strengthening the treasury system, improving financial reporting and building PFM capacity. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Public Disclosure Authorized Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Implementation Status and Key Decisions The most important achievement of FCGO is the business continuity of the Single Treasury System of Accounts (TSA) system in the recent earthquake in April/May 2015. This truly tested the Disaster Recovery & Business Continuity Plan of TSA. The TSA system was able to withstand the grave earthquake (which affected 14 districts and severely damaged TSA infrastructure in three districts) and was resurrected by the Government of Nepal within a day after the earthquake. This was possible due to a web based TSA, fall back network access through Nepal Telecom and using bare minimum computer equipment in make shift locations, tents, rented premises and borrowed equipment from Nepal Army. Key areas of progress since last mission includes roll out of the Revenue Management Information System (RMIS) in 15 District Treasury Controller 12/7/2015 Page 1 of 10
Offices (DTCOs) with effect from FY 2015-16 and roll out of commitment recording module in all the 75 districts. The government is now able to have online, real-time access to 90% of its revenue collections in these 15 districts (as compared to three districts with 45 % coverage last FY). Through the second component, Accounting Standards Board (ASB) successfully drafted the Nepalese Financial Reporting Standards (modeled on International Financial Reporting Standards) last year, and the Institute of Chartered Accountants of Nepal (ICAN) pronounced these standards with a road map for implementation. under second component, Nepal Public Sector Accounting Standards (NPSAS) pilots in two line departments were successfully completed and a certificate was received from International Consortium of Government Financial Management. Efforts continue to be made under the third component in reaching out to various stakeholders across the country to more remote districts, demand side stakeholders, line departments, financial sector, media and general public in increasing PFM awareness and building a solid foundation for ensuing PFM reform processes. After an extensive consultation among several stakeholders and quality assurance review, the second Public Expenditure and Financial Accountability (PEFA) Assessment for Nepal has been completed and a Second Phase PFM Reform Action Plan has been drafted, which is now in the process of further refinement and consolidation. The commitment roll-out, however, could not achieve the objectives of budget and cash control, as the commitments are being recorded ex-post in a stand-alone mode without blocking the available budget. The government, however, is committed to achieving these objectives which is further elaborated in the later section. The progress on some of the agreed activities have been slower than anticipated. These include completion of draft accounting manual, reporting access to the ministries, hiring of IT staff and IT procurement. It has been agreed during the mission that the government will expedite implementation of these actions. Risks Overall Risk Rating Risk Category Rating at Approval Previous Rating Current Rating Overall Moderate -- Moderate 12/7/2015 Page 2 of 10
Results Project Development Objective Indicators PHINDPDOTBL Percentage of overall budget executed through the DTCOs where the TSA system has been implemented (Percentage, Custom) Value 7.00 100.00 100.00 98.00 PHINDPDOTBL Budget Execution Reports and Financial Statements produced by the TSA system on a real time basis (Text, Custom) Value Nil 75 districts 75 districts 75 districts PHINDPDOTBL Preparation of consolidated financial statements for PILOT Ministries in accordance with Part 1, Cash IPSAS (Number, Custom) Value 0.00 2.00 2.00 2.00 PHINDPDOTBL Numbers of research studies into high priority PFM areas completed and disseminated (Number, Custom) Value 0.00 2.00 5.00 5.00 Studies are currently on for another 5 high priority areas and are likley to be completed by April 2015. 12/7/2015 Page 3 of 10
Overall Intermediate Results Indicators Number of DTCOs where TSA implemented (Number, Custom) Value 8.00 75.00 75.00 75.00 Number of Spending Unit (SU) Bank Accounts Closed (Number, Custom) Value 1300.00 13717.00 13800.00 14000.00 Number of FCGO, line department and DTCO staff trained or oriented; and still deployed to perform the functions envisaged (Number, Custom) Value 600.00 7026.00 7026.00 5500.00 12/7/2015 Page 4 of 10
Number of master trainers trained (TSA and IPSAS) and working as trainers under the project (Number, Custom) Value 0.00 41.00 35.00 75.00 Software redeveloped after removing bugs as reported in current software (Text, Custom) Value -- Functional Functional Functional Commitment recording system developed and implemented from July 16, 2014. RMIS prepared enhancing cash management/revenue management and piloted in Kathmandu valley from July 16, 2014 New features added in software to meet and additional feature such as commitment accounting (Text, Custom) Value -- Functional Functional Functional Commitment recording system developed and implementation started from July 16, 2014. Revenue Management Information System developed and piloting started from July 16, 2014 12/7/2015 Page 5 of 10
Preparation of consolidated financial statements for PILOT Ministries in accordance with Part 1, Cash IPSAS (Number, Custom) Value -- 2.00 2.00 2.00 Listed SOEs prepare accrual financial statements in accordance with IFRS (Percentage, Custom) Value 0.00 -- -- 100.00 NFRS (based on IFRS) prepared, approved and promulgated. Rollout promulgated by ICAN. Further implementation not within the mandate of ASB and will be carried out by ICAN. TOT provided by ASB Implementation of commitment controls in the budgetary entities of GoN (within pilot ministries) (Text, Custom) Value -- -- -- 100% of budgetary entities Commitment Control system developed and implementation started from July 16, 2014 across 75 districts in phases. Phased rollout. Refinmente in business process to be undertaken. 12/7/2015 Page 6 of 10
Number of persons trained in application of new accounting standards based on IFRS (Number, Custom) Value -- -- 40.00 225.00 20 people and TOT for 20 people Number of GoN finance and accounts staff trained in application of Cash based IPSAS and still deployed to perform the functions envisaged (Number, Custom) Value 0.00 -- 30.00 500.00 A workshop conducted with 30 participants Secretariat manual and procedures prepared and implemented (Text, Custom) Value -- Under implementation Implemented Implemented Operations manual for PEFA secretariat has been prepared in Nepali and approved by the Secretariat. Is currently under implementation. 12/7/2015 Page 7 of 10
Number of National level PEFA Steering committee meetings supported during the project period (Number, Custom) Value -- 16.00 20.00 12.00 Number of research studies completed and disseminated (Number, Custom) Value -- 2.00 6.00 12.00 Date 16-Dec-2010 30-Nov-2014 01-Sep-2015 30-Jun-2015 2 studies completed earlier + another4 completed in current year (1 to be completed by October 31, 2015) Carried out repeat PEFA assessment (Text, Custom) Value -- In process of finalization Completed and published Completed Date 16-Dec-2010 30-Nov-2014 28-Feb-2014 30-Jun-2016 PEFA assessment Number of seminars & workshops conducted for raising PFM awareness (Number, Custom) Value -- 59.00 59.00 7.00 59 PFM orientation programs (9 central, 13 regional and 45 district level) conducted. A high level ownership building program conducted for 12/7/2015 Page 8 of 10
the Secretaries of GON in presence of Finance Minister. PEFA journal published and disseminated (Number, Custom) Value -- 3.00 4.00 -- 3 volume of PEFA journal published, 4th volume is going to publish in end of September and 11th series of newsletters have been published and disseminated. Overall Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P125770 TF-10452 Effective USD 4.30 4.30 0.00 4.28 0.02 100% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P125770 TF-10452 Effective 31-Oct-2011 31-Oct-2011 31-Oct-2011 30-Jun-2015 30-Jun-2016 Cumulative Disbursements 12/7/2015 Page 9 of 10
Restructuring History There has been no restructuring to date. Related Project(s) P154401-Strengthening Public Financial Management II Project 12/7/2015 Page 10 of 10